Ted Cruz Is A Dolt (Obamacare for the Internet Edition, Part 2)

Ted Cruz, Texas Senator, Tea Party Icon, and Not An Internet Expert, has doubled down on his tweet the other day about Net Neutrality being “Obamacare for the Internet” with an Op-Ed in the Washington Post, wherein he manages to demonstrated he’s even more ignorant (or diinsabout the Internet and Net Neutrality than Twitter made him out to be.

Never before has it been so easy to turn an idea into a business. With a simple Internet connection, some ingenuity and a lot of hard work, anyone today can create a new service or app or start selling products nationwide.

In the past, such a person would have to know the right people and raise substantial start-up capital to get a brick-and-mortar store running. Not anymore. The Internet is the great equalizer when it comes to jobs and opportunity. We should make a commitment, right now, to keep it that way.

A laudable goal, Ted.  And, in fact, very much in line with what Net Neutrality is all about–keeping the current players in the Internet from tilting the playing field even further in their favor against potential competitors.

Ted then chit-chats about the wonders of the future Internet, entrepreneurialism and protection of mom-and-pop online retailers.  He lambastes proposed Internet Sales Tax measures, decries efforts to more globalize top-level Internet management, and then gets to the nitty-gritty:

We must promote growth in the technological sector, a consistent bright spot for the U.S. economy. But we won’t realize more of that dynamic growth unless we keep the Internet free from the kind of unnecessary regulation that is strangling our health-care, energy and banking industries.

Yes, health-care, energy, and banking — three industries where nobody makes any money. Curse you, unnecessary regulation!

And one of the biggest regulatory threats to the Internet is “net neutrality.”

Sigh.

In short, net neutrality is Obamacare for the Internet.

Except that it’s nothing like the ACA, even if it’s a catchy and politically popular turn of phrase.

It would put the government in charge of determining Internet pricing, terms of service and what types of products and services can be delivered, leading to fewer choices, fewer opportunities and higher prices.

President Obama this week came out aggressively for net neutrality and turning the Internet into a public utility.

So let’s talk briefly about what Net Neutrality is (assuming that Oatmeal cartoon had too many long words for you, Ted).  Net Neutrality is, first off, the status quo, though that picture is quickly changing. So this isn’t imposing some new way of life on the Internet and its service providers. It’s maintaining how things have been during that “dynamic growth” of the Internet you were lauding a while back.

Net Neutrality says that an ISP cannot discriminate in service provision between different web content providers, for money or for competitive reasons.  Comcast can’t say, “Hey, if you want faster service than your competitors, pay us money and it will happen. Otherwise, your service will be in the ‘slow lane’ and nobody will use it.”  Comcast can’t say, “Hey, we own our own streaming video service, so we’re going to make sure it gets all the fast pipes and throttle down or cause hiccups in the competing services from Amazon and Netflix.” Comcast can’t say, “Microsoft has paid us extra money, so Bing searches will go through 50% faster than Google searches … unless Google wants to pay us extra money, too.”

That’s pretty much it. Just like AT&T Long Distance can’t go to each local telco and tell them that they either pay more or their calls will all be delayed and have crap connections. Or start up their own local telco and give preferential treatment to calls that come from it.

Nothing there about control of content, or what households pay for Internet service. ISPs are providing a backbone service, and cannot discriminate

The point of classifying ISPs as public utilities is that it allows, under the current laws, the FCC to require Net Neutrality from those service providers. Until the a court disagreed, the FCC had net neutrality rules already in place, as well as specific agreements (as part of mergers, with expiration dates) about the matter. With those rules thrown over, ISPs like Comcast have indicated that they do plan on going ahead with “fast lanes” for preferred content providers, and the recent Comcast / Netflix kerfuffle (Comcast wanted more money, Netflix said nuh-uh, Netflix performance on the Comcast network went way down, Netflix paid up) shows that they’re more than willing to punish content providers who don’t play along. And guess who pays the difference?

And circling back to your paean to mom-and-pop online retailers and entrepreneurial opportunities, Ted, Net Neutrality is critical to both. Let’s say I’ve got a great new idea for a streaming video service. Right now, I’m limited only by my ability to buy enough servers and bandwidth to meet the traffic demands of the consumers that will want this great new service I’m offering. That’s because I’m treated neutrally by the Internet Service Providers between me and my customers. But without Net Neutrality, the existing players in that space — Netflix, Hulu, Amazon, YouTube — can all buy (in fact, are sort of forced to buy) “fast lane” access; if I don’t (and how can any start-up compete with the deep pockets of those companies), my service will be slower, less reliable, and have far less opportunity for success.

In short, the question is not “Who controls the Internet, the EVIL GOVERNMENT or FREEDOM?” but “Who controls the Internet, the EVIL GOVERNMENT or COMCAST, VERIZON, AT&T, ETC.?”  If control is necessary, I’d rather have the folk I vote for in charge.

Some in the online community have embraced this call, thinking that cheaper prices would result.

I don’t think I’ve ready anyone saying that Net Neutrality will reduce prices. It will almost certainly prevent prices from going up. When Netflix and Amazon get into a bidding war with Comcast over whose video streaming will get the fastest “fast lane,” who do you think is going to end up paying for that competition?(Hint: it’s not really Netflix or Amazon.)

But when has that worked? Government-regulated utilities invariably destroy innovation and freedom. Which is more innovative, the U.S. Postal Service or Facebook and Twitter? Which is better for consumers, city taxi commissions or Uber and Lyft?

Which do you want to have providing water to you, a government-regulated public utility, or a local monopoly or duopoly who will charge you whatever they think you can pony up?  Which do you want to have providing highways for you, a bureaucratic state department of transportation, or a private highway company that owns the roads and charges different people different tolls based on whether their local town is willing to pay for more lanes and fewer signals? Or that cuts a deal with Walmart to allow Walmart trucks to drive in the fast lane at whatever speed they want, but all the other supermarket trucks have to stay on the slow lane to the right?

(It’s worth noting, Ted, that most of the government regulation on the USPS have been imposed by Congress, and a lot of it has been explicitly set up, primarily by Republicans, to prevent it from innovating and going into new and different lines of business that would compete with private firms. If the USPS wanted to come up with an innovative new service, it can’t do so without Congress giving permission.)

If the federal government seizes the power to regulate Internet pricing and goods and services, the regulations will never end.

That’s a broader philosophical statement that can be debated separately. Ultimately, it argues that there should be no regulations of any kind, “seized” or not. After all, the federal government “seized” the power to regulate workplace safety, “seized” the power to require overtime beyond a 40 hour work week, “seized” the power to regulate what factories could dump into rivers. Regulation per se is neither good nor evil; how it is applied (what is regulated, in what fashion, to what end) is what makes the difference. Argue to the particular case, not that regulations and laws are wrong in and of themselves.

We should keep the federal government out of the business of regulating the Internet. The United States has always been a place where someone with nothing can achieve anything. Freedom allows that social mobility, and the Internet is a haven for that entrepreneurial freedom.

Call it the American Dream 2.0.

Which sounds very bold, and leaderly, and Tea Partyish, and patriotic, Ted — but is kind of goofy. It’s like saying, “We should keep the government out of the business of regulating highways, because of mobility and commerce and stuff.” Which sounds great, until your realize that means no speed limits, no lanes, no rules on signage or highway design, nothing to keep someone from just plugging a side street into the freeway, all those good things.  A bit of regulation can be a good thing, Ted — it can keep you from being run over.

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